Morning Ferrous Markets
Market Overview
In the United States, hot-rolled coil (HR coil) prices have fallen for the tenth consecutive week, driven by an imbalance between supply and demand. Service center order volume, inventory levels, and prices are beginning to stabilize, but likely to remain muted near-term. Meanwhile, Chinese steel prices have declined due to adverse weather conditions, leading to a seasonal slowdown in production. Rising steel inventories indicate slowing downstream demand, but robust steel exports have remained a pressure point for global prices and politics, particularly in Europe, with May exports at the highest level since 2015. This surge in Chinese exports has contributed to a bearish sentiment in the region. Additionally, the European steel market remains weak, with declining prices and sluggish end-user demand. Although a new EU safeguard measure may reduce competition from imports, the region's market stability and recovery continue to face challenges.
Upcoming Data Releases
North American (US) HRC Steel Market
US HRC front-month prices have fallen for the tenth consecutive week, dropping by $47 per short ton (st) to $699/st, while cold-rolled coil prices decreased by $23/st to $1,047/st and HDG coil base prices fell by $6/st to $984/st. That said, US HRC steel futures saw notable price increases with the August-24 contract rising by 1.45% to $700 per short ton and the December-24 contract increasing by 1.15% to $790 per short ton. The continuous price decline is driven by an imbalance between supply and demand, with mills exposed to sectors like agriculture and construction reducing shifts amid slowing demand. Service centers are limiting buys, leading to steady inventory levels and falling daily shipping rates, which suggests prices may not rise in the near term. The ongoing strike at an ArcelorMittal facility in Mexico could also affect supply chains if prolonged.
HRC Front Month 3 Day Trend
StoneX & Bloomberg
HRC Front Month 6 Month Price Trend
StoneX & Bloomberg
Chinese Steel & Iron Ore Markets
SGX Iron Ore experienced significant declines, with the May-25 contract dropping by 1.02% to $101.16 per metric ton, the December-24 contract decreasing by 0.9% to $103.82 per metric ton, and the March-25 contract falling by 0.89% to $102.27 per metric ton. Downstream, Chinese domestic steel prices have fallen due to flood warnings and adverse weather impacting construction and transportation. Production slowed into a seasonally weaker period, with a 3% YoY decline in mid-June. Steel inventories have risen by 7% YoY, indicating slowing downstream demand. Despite lower domestic consumption, China's steel exports remain robust, with May exports annualized at 113Mt, the highest since 2015, and 23% higher YoY for the first five months of 2024. This export surge is putting pressure on steel prices outside China, particularly in Europe. Meanwhile, imported sheet product prices in Asia also decreased due to weak demand and strong supply, with HRC Steel offers in Vietnam dropping to $540/mt CFR. The bearish sentiment in the Chinese market and robust exports continue to influence steel prices in the region.
SGX Iron Ore CFR China (62%) Futures
StoneX & Bloomberg
European Steel and Steel Scrap Markets
Day-over-day changes for LME Turkish Scrap (JB01 to JB12) shows prices are an average of ~1.25% higher in the 2, 3, and 4-month futures contracts; however, the mild price appreciation tapers off as we move towards the later dated contracts with JBO12 raising a modest .25%. Prices for near-term contracts are still below their key moving averages, suggesting ongoing downward pressure in the market. Overall, the European steel market remains weak, with prices declining across various products. German and Italian HRC prices have dropped to €629/mt and €635/mt, respectively, reflecting low demand. Although a modest restocking occurred 4–6 weeks ago, it has not been sustained. The introduction of a new EU safeguard measure on July 1, which caps imports from certain countries, may benefit EU producers by reducing competition. However, end-user demand remains sluggish, and attempts by EU mills to raise prices have been met with resistance. Despite elevated exports, China’s domestic steel production is slowing, adding further pressure to global prices. The European market’s reliance on imports and fluctuating domestic demand continue to challenge price stability and market recovery.
Turkish Scrap 1st Month Futures
StoneX & Bloomberg
Current Prices
